Public funding of failing banks in the European Union (LBF vol. 19) 2020/3.5.4:3.5.4 Assessment criteria for rescue aid

Public funding of failing banks in the European Union (LBF vol. 19) 2020/3.5.4

3.5.4 Assessment criteria for rescue aid

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The 2013 Banking Communication lists the assessment criteria which reflect the general principles set out in the previous section in light of the specific policy context. Due to the fact that the 2013 Banking Communication should be read in conjunction with the (amended) Crisis Communications, other than the 2008 Banking Communication (repealed by the 2013 Banking Communication), it is sometimes difficult to establish which criteria exactly apply. Against this background, this section attempts to provide a complete overview of the assessment criteria for each type of aid measure that can be granted to banks, as set out in section 3.4.3.2.

It can be deducted from the Commission’s decisions that it is not always necessary to meet all assessment criteria, as long as the principles are complied with.1 For example, in the case of State aid to QIL, the Commission considered that the objectives pursued by the requirement for appropriate remuneration, namely burden-sharing and minimising competition distortion, had been attained by other means. It therefore concluded that, despite non-compliance with the criteria of valuation and remuneration, in view of the far-reaching restructuring, and taking into account that the competition distortion had been limited by the scaling-down and sale of parts of QIL in an open, transparent and unconditional tender, the asset relief in favour of the Irish general insurance activities of QIL sold to the joint venture set up by Liberty Mutual and Anglo was in conformity with the Impaired Assets Communication.2

3.5.4.1 Funding guarantees and liquidity support3.5.4.2 Rescue recapitalisations3.5.4.3 Rescue asset relief measures

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